Ladies and gentlemen, good day and welcome to Oberoi Realty Q1 FY23 earnings conference call. We have Mr. Oberoi, the Chairman and Managing Director of the company, and Mr. Saumil Daru, Director of Finance of the company, with us for the call. Please note that this call will be for 30 minutes, and for the duration of this call, all participant lines will be in the listen-only mode and the conference will be recorded. The transfer for the same may be put up on the website of the company. After the management discussion, there will be an opportunity for you to ask questions. Should anyone need assistance during the conference call, you may signal the operator by pressing star then zero on your touchtone telephone. Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements, including those relating to general business statements, plans, strategy of the company, the future financial condition, and growth prospect. The forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities, and growth potential to differ materially from those suggested by such statements. Mr. Oberoi, the Chairman and Managing Director of the company, thank you, and over to you, sir. Thank you. Good morning, good afternoon, good evening to all of you as per the time zones you have logged in, and welcome to the conference call Q1 FY 2023 results and business update. Thank you all for taking time out for this call. We're happy to see business back as usual and hope to have a great year across all our portfolios, be it residential, retail, commercial, and hospitality. Despite various dynamics at play in the economy, such as inflation, rising costs in supply chain, we at Oberoi Realty have started off with a good year with a strong booking and strong bottom line. Before we begin, I would like to share with you a few quick business updates. I'm happy to announce that we have received occupancy certificate for Three Sixty West and are looking forward to its robust sale. We've also crossed INR 5,000 crores in consolidated sales in our Sky City project with a healthy sales velocity. As is evident, we are witnessing a turnaround in hospitality. We're maintaining our margins in the residential and steady recovery in retail projects. With this, I would like to open the floor for question and answer, and Saumil and I will both be very happy to answer your questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star then one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants, you may press star and one to ask the question. First question is from the line of Kunal Lakhan from CLSA. Please go ahead. Yeah. Hi. Thanks. Vikas, first question was on your Worli project again. You have received the OC now and I can see there's some balance collection of about INR 1,000 crore there. Two parts to the question. Just firstly, like when do you expect this INR 1,000 crore to come by now? Because I mean, I'm sure you'll be raising the demand. Sorry to interrupt, your voice is not clear. Yeah. Is it better now? Yes. Yeah. My first question was on whether, when can we expect the INR 1,000 crore or INR 1,100-odd crore from Worli to come in our books? And secondly, you know, considering that we have sold your inventory worth INR 2,600 crore, and we've always had a waterfall structure in terms of, you know, sharing the receivables, how do you think the future sales get split between us and the partners going ahead? That's my first question on Worli. Kunal, just quickly, jumping in before Mr. Oberoi answers. Just to clarify, you know, the total booking value in Three Sixty West is about INR 2,684 crores, and the amount collected is already some INR 2,519 crores. There's about INR 150 odd crores to be collected and not 1,000 odd crores. That's all. Sure. Thanks for correcting. In terms of incremental cash flows from Worli now, how would that get split? Okay. Mr. Oberoi, if he could answer that. Hi. Firstly, you know, very excited that Three Sixty West has got occupation certificate. We have close to 70 apartments that are sold. A lot of them have done their interiors. They move in. What is important for you guys to note is that this came in a day before our RERA deadline, so we are within the timelines, number one. Number two, as far as the split goes. Our document talks of 80% of the money comes to ORL until ORL receives all the investment that they have done in the project, and 20% continue to go to the partner. Once we have recovered, there is a catch-up on the 20% that the partner has taken. From then on, there is a split based on the agreement. Yeah, so that's how it is. Sure. That's helpful. My second question was on the cash flows that you've shared in your presentation. Your investing cash flow is showing about -INR 1,078 crores. Could you just help understand what is that? Saumil, this is yours. Yeah, Kunal, hi. Basically, the investing cash flows take care of two things. One is, you know, they reflect the treasury activity, so they represent the mutual fund investments. The second bit is the investment which goes into the capital assets. Which is your, you know, the construction of Commerz III and basically what we can say, the Sky City Mall. That's what this represents. We haven't seen much of an increase in the CWIP or gross block as such. Would it be fair to assume this is all? Permanently treasury. Sure. If you also see the short-term investments below, it shows about INR 932 crore in that same cash flow. Yeah. Yeah. 932 is a component of that INR 1,074 crore. Or INR 1,078 crore, sorry. Yeah. Understood. Thank you so much. I'll come back to you. Thank you so much, Kunal. Thank you. The next question is from the line of Puneet from HSBC. Please go ahead. Yeah, thank you so much, and congratulations on, you know, good momentum on the sales side. Can you talk a bit about, you know, what's the progress on Thane, Pedder Road, and also share broad, you know, economic interest and, you know, cost and realization estimates there? Hi, Puneet. Good afternoon. Thane, like I said, that we are planning to launch in the festive season. We are ready with our show apartment. You know, we believe that the Thane market is a good market. We have mapped sales of some of the prominent developers, and they look very, very encouraging. Pedder Road, again, is work in progress. A little too early for us to get into exact numbers. We are still, you know, on the drawing board. Once we have clarity, we'll come back to you. Maybe in a quarter or two. Any payment for Pedder Road hasn't been done so far, right? Yeah, yeah. No, payments have been done for both. Whatever was our component to be paid has been paid. You know, one tranche for Kolshet has been paid, and the entire amount for Pedder Road has been paid. And these are both, you know, either revenue share or area share. And I mean, no input on cost from the landowners. It's a very refined and a unique joint venture. We personally feel very happy and proud of that. That's it. You know, once we have more clarity, we'll be able to tell you. We do have some numbers on Kolshet, but again, like I said, they're a little too premature. We are still on the drawing board. You know, what we did as a business plan when we purchased, or rather when we got into this transaction was one. We want to come to the market with a filtered version, with something much closer to what you will see play out than, you know, very early business assumptions. Okay. Revenue share and area share are still to be frozen in some sense. No, no, they are all frozen. Like I said, you know. Can you share what those numbers are? They're all a percentage of the gross area that we will generate. They're a percentage of the gross revenue we'll generate. We are still, you know, working on it. We're still trying to, you know, get to the accurate numbers, and then we would rather tell you instead of we telling you. We have a conservative number, but that really doesn't help. We want to be sure. I understand. Okay. Any progress on the Glaxo Worli land? What is the plan now? Last time you talked about still, you know, trying to think about commercial space. Have you frozen anything on that yet? Correct. Like I said that we, you know, even the last time I said that we were all set to do commercial before COVID broke through. We realized that, no, you know, residential is a better bet because all across the residential did better. Eventually, even the mall business and commercial is back. We do get a higher FAR when we build commercial, but a lower realization in terms of per square foot revenue. You know, residential we get higher realization over lower FAR. We are still contemplating. Both our plans are ready, but we haven't been able to take a call. We still continue to contemplate. Okay. We were also waiting, you know, now that Worli one is built and being sold, this clearly would not be a competition because even if, let's say, if I'm going to do residential. This would be three to four years, you know, or at the least in the making. Again, we are spoiled for choice, you know, and that's the only reason we are not able to kind of decide, but we should do that soon. Understood. In the current numbers, we are also seeing a quite nice uptake on your realization. Do you expect this realization growth to continue into the end of this year as well? You know, I genuinely feel that this should continue because whatever was ready in the market has pretty much been absorbed. There is very little that is under construction. Even if there is, you know, a huge issue of acceptability from the buyer's point of view, be it the brand name, be it the ability to deliver quality, deliver on time. Forget both actually deliver also. Given all the uncertainties and under construction and, you know, commodity cycle hitting an all-time high, even though there is a little bit of a correction, but still continuing to go high, I see it's imperative for developers to increase price because their input costs are gonna go up. I feel that you will always see realization go up and even for the ready product. If they don't, then they'll fall into their own trap of, you know, not being able to deliver, you know, to their commitment. Understood. My last one is, any plans for another phase launched in Goregaon? Goregaon, we have launched two buildings. Yeah. Work is on for four. We have seen tremendous velocity. We were pleasantly surprised when we started the second one. It did 3-4x of what we wanted. The good news here is that we don't have pretty much a single square foot that is ready and for sale. Maybe one-off flat, you know, literally like that. Given that, you know, that it's become a favorite destination, at least for people to stay, we see no reason why we would not launch more phases, you know, in the coming quarters. It may not be the immediate next. Could be the one after that. Yes, I mean, you know, that's really Goregaon, our cash cow, which, you know, we can literally turn the tap on anytime we like. We should look forward to another launch sometime this fiscal? Why not? Understood. That's very helpful. Thank you so much, and all the best. Thank you, Puneet. Thank you. Next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Hi. Thank you very much, and good evening, everyone. Quick question is on the demand scenario, because I, you know, echo your initial statement, but given what's going on in the market, the volatility, inflation, and now the rising mortgage rate, are you seeing any sort of slowdown in terms of footfalls or visits, et cetera? Hi, Sameer. Sameer, frankly, I'm not seeing any slowdown. Probably one of the stronger reasons is there is a clear shift from these buyers, you know, towards better quality developers. I mean, they're gravitating towards better quality developers. I clearly see our numbers continue to increase. I would like to believe what you're saying is true, but this must have been true for developers, you know, who don't have a good brand name, who have not delivered quality and in time. They are losing customers. Even if, let's say the overall market is shrinking, our share in the market continues to increase. I mean, if what you're saying is true, this is the only logic I can apply because we don't see any drop in demand. I mean, we continue to see huge momentum. In fact, for me, I feel that, you know, construction cost is bound to go up. Whoever will not book today and not book it with a reputed developer who's known to deliver as promised will probably lose out because, you know, it's not gonna be easy for people to continue to hold these prices. Even if there's a slowdown in demand, because you can't be selling at a loss. You know, thanks for this. Vikas, the second question is on pricing, and especially for Mulund and Borivali. Have you taken any price increase over the last three to four quarters, and your thoughts on this? Sameer, you know, we have only removed certain things like, you know, what we did was, we were giving, let's say, developer subvention, bank subvention. What we have done is we have. I mean, you know, some of these were at a higher price. We've just changed the category and whatever was at a lower price pushed into a higher price, so on and so forth. We have done a little bit of tweaking, you know, price increase by 5%, 7%, 10%, nothing more than that. Nothing substantial. It's all, you know, it's real money for us, but it's optics for the world. We've been able to play around with the price by 5%-10%, which looks optical for the world, but it's actual real money for us. In a very, very simple, interesting way. Okay. This contrast versus what you have done in, say, Worli or Goregaon, where you have taken the headline rates up and quite meaningfully. Correct. With no resistance. You know, that's the most amazing part. Wonderful. That's very clear. Final question, Vikas, is just a broader one. Now that there's been a change in the Maharashtra state government, you know, anything that you can, we can expect on the regulatory side or any implication for the sector or for the company? Samir, you know, we stay away from this, you know, the bargepole, literally. You know, we're completely agnostic to who's running the government. I'm sure everybody means well. Having said that, I feel, you know, one thing for sure, that the center-state alignment will help the state. We love the fact that, you know, now bullet train will become a reality very much sooner than, you know, what would have happened earlier. So huge positives for the state to be simply aligned, you know, with the central government. So this is one. I feel, you know, going by our past track record, we see that, you know, this government also is gonna come up with, you know, very positive, you know, like, pro-people policy. I think the state is bound to do that, you know. I think it's really bound to do that. You know, we are, like, literally two and a half years in, another two and a half years to go. I think any political party would like to really keep these two and a half years, and especially because, you know, these guys have got only two and a half. They'll want to work as if for the five-year term. They will go all out, you know. Even something like, you know, the Versova-Virar link, I was reading that the central government is ready to do it, state government wants it to do it. Earlier, it would be that, you know, I won't share my credit with the central government and so on and so forth, you know. I would say that, in all, I think we are much better off. You know, it's a positive. Okay. Thank you very much. Yeah. Thanks. Thanks, Samir. Thank you. Next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Hi, Vikas. Congratulations on a- Hi. Hi. Very, very good quarter. My first question is on Three Sixty West. If you can just highlight how much price increase you have taken here. How is the prospect pipeline looking? Because as per our channel check looks towards north of 20 apartments. If you can just touch upon these two things first. You know, if you see, actually, the entire area, you know, and probably we have the best product in the city. I mean, I don't want to sound pompous, probably the best product in the country and among the best in the world. If you see, you know, buildings that are not even at par with ours are selling at anywhere between INR 100,000-INR 110,000 on carpet. We don't believe that we should be in, you know, a little higher than that ballpark. Anywhere between INR 100,000-INR 120,000 on carpet is what we would love to aim at. You know, fingers crossed. One other thing I want to tell everybody is that we have got our entire building approved under the 2034 DCR. This means that all the free area that we had taken, the decks, they're all taken in FSI. The occupation certificate is as per the 2034 DCR, which is like huge, you know. Not that anything wrong with the earlier one, but today, you know, our carpet area also has gone up big time. This, all this really, you know, helps us really market the product better and get a better realization. You know, at the back of all this and with what is happening in the vicinity, we tend to believe that we could get something like this. Okay, great, sir. Any views on the challenges with your partner is facing currently that will have any impact on the project sales? Sorry. Come again. Sorry, really what? Any views on the challenges which your partner is facing in this project and if it will increase? Not really. I mean, you know, at least not nothing. I mean, you know, this is a separate project. Really no. Okay. The second question on the business development, Vikas. We have been talking for many quarters now on the non-MMR story. Even the last call you highlighted, even you are actively looking at setting up like offices and malls within non-MMR. Any update? Are we looking to break ground this year? Potentially, if you can highlight anything we can hear from you on this in the second half, I mean, substantial on this front. You know, I am very keen. I'm continuing to be doing that. I want to get in, you know, in the right project at the right time, at the right price. For me, you know, it's not about ticking the box at the end of the day. You know, we put a dot on hundred years ahead for the company. We want to focus on the right things. You know, for us, these basic things are very important. A project outside Mumbai is a by-product of all this. Hence, I would, you know, wait for the right project and only then probably, you know, go about doing things. Anything likely getting close in this financial year? Because last, I think you were more positive in the last quarter. I would say yes. Again, like I said that, you know, I take these calls very seriously and I take my commitments really very seriously. Hence, I'm a little skeptical in just committing a date. I must tell you that we very vigorously continue to, you know, go after it. As and when we get it, we will be there, you know. Okay. Thank you. Those were my questions. Thanks. Thank you. The next question is from the line of Parvez Akhtar Qazi from Edelweiss Securities. Please go ahead. Hi, Parvez. Yeah. Hi, Vikas. Good afternoon and congratulations for the good set of numbers. Two questions largely from my side. First, what would be the completion timelines for the Sky City Mall and Commerz III? Second, when can we expect some inventory release in the Sky City project? Thank you. Both these projects should be, you know, ready by next year March, for fit-outs. I think the mall should start its commercial activity, pretty much, in the next year, maybe towards the festive seasons. Our target is to get ready before next Diwali. Same as with the Commerz III. We should be ready with Commerz III for fit-out by March of next year. You know, rent commencement within a year after that. That's our commitment also to our tenants, and we are pretty much on time. What was your other question? Sorry. Okay. The third phase of Borivali also, you know, is there in the reckoning. Again, like, Goregaon, Borivali also happens to be literally our cash cow. Yeah. Can we expect something to come up this fiscal? Sure. I mean, why not? Yeah, we could do that. Again, you know, if you see Borivali, like I said, that it clocks across INR 5,000 crores of sales and continuing to do so with great velocity. We do hope. In fact, you know, we've done some fresh reconfiguration, and I believe that you know, the markets will love it. These are slightly bigger area apartments and we see you know, there's a huge push towards larger area luxury, and we are trying to bring that there now. You know, with much higher realization. Huge positive, I would say. We are looking at you know, launching this you know, within this financial year for sure. Great to hear. Congratulations and all the best for future. Thank you so much. Thank you. The next question is from the line of Pritesh Sheth from Motilal Oswal. Please go ahead. Hi. Thanks for taking my question, and congrats on finally getting the OC for Three Sixty West. My first question is, you know, on similar lines with what Sameer had asked earlier on the impact of mortgage rates. You know, we see a drop in sales velocity both in Sky City and Maxima to an extent as well. I'm not trying to be very critical, but, I mean, particularly I would assume that these would be the projects where your mortgage mix would be comparatively higher, versus the other projects. Anything to read into this drop in sales velocity because of maybe some increase in mortgage rates, if you can add it? Can I tell you'll be very happy to know that we hardly have anything to sell in Maxima. That's point number one. There is no drop really. It's like a clean sweep there. On Sky City also, as the earlier question asked was when are you gonna launch? We are left with probably 15% or 10% of the inventory that we had launched. Obviously, you know, either these are very high floors or you know, something like that. That's why you see. Even there, I mean, you know, you really see numbers. They're not like a drop in velocity. They are more to do with what is available and, you know, people are. I have a huge backlog of people wanting to buy the next phase when I launch. A lot of people are holding back. Then now you also know that Sky City is virtually near completion, and we should be giving possession, soon. You know, people are waiting that, you know, I'd, you know, pay all of it and take possession instead of being into a project like that. Absolutely no drop in velocity as far as we are concerned. For us, you know, you'll be surprised that we have been tracking people who buy our apartments. Most of them take a 10-year loan, repaid in thee years. So cost of money in India is anyway very high. You know, we hardly have any standard deduction for the interest that one pays to buy a house. You know, most people, you know, even if they're taking loan, it's a stopgap arrangement. Effective cost for them, if it's a three-year loan, doesn't really work out to be much. These are things that one really needs to know. If our, you know, borrowing costs were way too low, then one would understand that increase in cost could hurt you in sales. With the, you know, interest costs anyway being high and you know. People don't really want to borrow for too long. I've seen that if I give, you know, an attractive price to people where they have to pay construction-linked plan versus a bank subvention or a developer subvention, they're happy paying the developers with good repute upfront money as in, as and when you build. They don't want to, you know, pay for the credit because it's anyway high. You know, a few hundred basis points also, you know, forget 50, 75, but I don't see effect. Yes, you know, the press speaks and makes a lot about it because the government wants. You know, why do they increase interest rates? Because they want to actually control inflation, and they then want to send these signals in the market. You know, emotionally, yes, probably a few people get a little rattled when interest rates go up, but by and large, we haven't seen any impact on sales. You know, not at least to our sales. Got it. That's very helpful, and I would agree to your point. Second question is on your existing vacancies in your Commerz I and Commerz II. Particularly Commerz I, we have seen at least now 10, 11 quarters since you know vacancy has remained high. Even there was a drop in occupancy for Commerz II as well. Any comments on them when we should be able to you know lease that out again fully? You know, frankly, both Commerz I and Commerz II were never literally our absolute focus. We realized that, you know, we, with Commerz III, will have a large portfolio of close to, you know, 5+ million sq ft of leasable area. Hence we now have a business head with an entire team looking after that. It's just been, you know, a few months. You would have seen in social media that we have started doing revisits of all the IPCs. We have a, you know, very customer-centric approach here. We see very good traction here. You'll see that, you know, we've already started closing deals. In the coming month, I mean, our internal target is that we will reach, you know, 100% occupancy within Commerz I and II in this financial year itself. We've set these targets. We have a team now, a completely focused team. We had a very small team earlier. It was like business by the way for us. Now this is serious business for us. We will make sure that we not only get the occupancies at the high 90s% but also, you know, push and become the, you know, first preferred destination for any customer. Got it. Thanks. That's very helpful. Thank you, and all the best. Thank you, again. Thank you very much. Ladies and gentlemen, we'll take that as the last question. I will now hand the conference over to Mr. Vikas Oberoi for closing comments. Thank you all for taking time out for this call. We look forward to hearing from you on a regular basis. If you have any queries, please feel free to speak with our CFO or my investor relations team, and we will be more than happy to answer all your questions. Thank you once again, and have a great week ahead. Thank you. Thank you very much. On behalf of Oberoi Realty, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.